There is $1 trillion in federal student debt today, and the possibility of default on those taxpayer-backed loans poses an acute risk to the economy’s recovery. Congress, faced with troubling default rates in the past, has made it especially hard for borrowers to get bankruptcy relief for student loans, and so only some hundreds try every year. And while there has been attention to aggressive student debt collectors hired by the federal government, the organization pursuing Ms. Jorgensen does something else: it brings legal challenges to those few who are desperate enough to seek bankruptcy relief.
That organization is the Educational Credit Management Corporation, which, since its founding in Minnesota nearly two decades ago, has been the main private entity hired by the Department of Education to fight student debtors who file for bankruptcy on federal loans.
Sunday, January 5, 2014
NYTimes: Loan Monitor Is Accused of Ruthless Tactics on Student Debt
Happy new Year! As I continue to post articles about the student loan debt crisis in America, this New York Times article by Natalie Kitroeff perfectly highlights why the post-secondary financial aid system needs major reform at the federal level. Such predatory collection tactics should stop since they ignore basic human decency and compassion. Furthermore, student loans, both federal and private, should be eligible for bankruptcy protection just like medical, auto, and credit card debt.